• 4 minutes Energy Armageddon
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 10 minutes Wind droughts
  • 12 hours "Biden Is Running U.S. Energy Security Into The Ground" by Irina Slav
  • 2 hours "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 2 days "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 2 hours Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 12 days "Forget Oil, The Real Crisis Is Diesel Inventories: The US Has Just 25 Days Left" by Zero Hedge - 5 Stars *****
  • 5 days The Federal Reserve and Money...Aspects which are not widely known
  • 3 days "Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav
  • 9 days Is Europe heading for winter of discontent with extensive gas shortages?
  • 5 days "Dodgy Demand Data? The Oil Price Collapse Conspiracy" by Alex Kimani
  • 12 days "The Global Digital ID Prison" by James Corbett of CorbettReport.com
  • 13 days Goldman Betting on Cryptocurrencies
  • 16 days Сryptocurrency predictions

Scores Of Fuel Ships Stranded Off Mexico As Pemex Debt Mounts

An estimated 60-plus vessels carrying imported gasoline, diesel and fuel are stranded off the coast of Mexico due to storage bottlenecks, Bloomberg reports.

Unable to unload due to a backlog reminiscent of the height of the COVID pandemic when Mexico declared force majeure, fuel importers are paying some $40,000 a day per vessel in the waiting line, while Mexican state-run Pemex struggles in the red. 

According to Bloomberg, the vessels stuck in this holding pattern presently contain approximately 60% of Mexico’s monthly fuel demand

At the same time, oil exports by Mexico’s state-run Pemex continue to plummet. 

As Mexico attempts to reduce its dependence on foreign energy sources, Pemex is shifting toward refining, which is negatively impacting the company’s balance sheet, according to BNAmericas

On July 11th, Moody’s Investors Services downgraded Pemex after investigating its refining-related finances. 

Moody’s cut Pemex's credit rating to B1 from Ba3, representing a downgrade of four notches and reflecting a higher risk of default.

The debt picture is dire. This year, Pemex has a looming debt payment of $5.1 billion. Next year, another $7.5 billion comes due, and nearly $9 billion in 2024. 

"Pemex will have substantial negative free cash flow in the next 12-18 months, driven by insufficient operating cash generation to pay interest expenses, taxes, and capital spending," said Moody's.

This level of risk limits Pemex’s access to the capital markets. 

While Pemex is looking to increase its refining capacity to be able to meet domestic demand by the end of next year, the plan comes at a high cost. 

According to Moody’s this requires, among other things, the construction of a new refinery that can process 340,000 bpd. That refinery, however, could end up costing more than double the initial $8 billion estimate due to hefty cost overruns. Additionally, new reports indicate that the refinery may not achieve the 340,000 bpd capacity until years later than originally anticipated. 

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News